A specialist auditor has called on the industry to fight against the proposed new deadline for the preparation of SMSF accounts and statements due to its impractical nature and the problems it poses for certain trustees.
Tactical Super director Deanne Firth said Item 67 in the “Miscellaneous amendments to Treasury portfolio laws 2020”, which stipulates accounts and statements for SMSFs must be prepared at least 45 days prior to lodgement of the fund’s annual return, is problematic and warrants action from practitioners to prevent it from being implemented.
Further, Firth pointed out the change would unfairly impact newly established SMSFs and those funds that have lodged the annual return late in a prior year.
“What this means is if you’ve got a first-year fund or one that lodged late in a previous year, which means the lodgement date would be 31 October, the accounts would need to be completed 45 days prior to that, [being] 16 September,” she told delegates at the Chartered Accountants Australia and New Zealand (CAANZ) National SMSF Conference Online 2020.
“This is less than three months after the financial year and before managed investment annual tax statements are even completed.”
According to Firth, many SMSFs would struggle to have their accounts and statements finalised before 31 March or 45 days before the conventional 15 May annual return lodgement date, let alone be able to adhere to a September deadline.
As such, she has appealed to all practitioners to write to the CAANZ expressing their concerns over the amendment so the professional body can communicate this angst to Treasury before the consultation process ends on 17 November.
“This is massive … because it’s going to completely change the lodgement program, but it’s also not practical, especially for those early lodgers, first-year funds. Sixteen September just is not a realistic time frame,” she said.
In addition, the amendment states failing to comply with the requirement will attract 10 administration penalty units, amounting to a fine of $2220, which she said was too harsh on SMSFs that have lodged a late annual return.
“We’ve already got SMSFs with late annual returns being removed off the Super Fund Lookup register so they can’t receive contributions. Coupled with the penalties, there are huge repercussions for SMSFs that are late [in lodging the annual return],” she said.
“I just don’t think we need this as well because really all it does is put pressure on accountants.”
Concerns have already been raised that documents may be backdated in order to comply with this change.